MR. FLEISCHER: Good
afternoon. Let me begin with a personnel
announcement. The President today announced his intention to
nominate Hans Hertell to be Ambassador of the United States to the
Dominican Republic.

Also I just want to advise you that at 4:15
p.m. this afternoon a senior administration official will come to the
podium here for a background readout on the meeting with the President
of Macedonia, which will take place just before that time.

And with that, I'm pleased to take your
questions.

Q Tomorrow, President
Bush is receiving President Fox. I would like to ask you if
you can give us something in advance maybe about the issue of
immigration, the request of President Fox to open borders to
immigrants?

MR. FLEISCHER: Well, I think there
will be a series of topics discussed at that meeting. It
will be the importance of our bilateral relationship. Trade
issues will come up. I'd anticipate energy issues may come
up. Immigration may come up.

As you know, yesterday the President sent a
letter to members of Congress expressing his support for extending the
deadline so that family members who would otherwise have to leave the
United States in order to apply for legal status in the United States
will not be forced to break up with their families.

That's part of the President's approach, that
we should be a welcoming nation to immigrants. I anticipate
those topics could come up tomorrow.

Q Ari, congressional
Republicans say that they have reached a deal on not just the tax part,
but the spending as part of the President's budget blueprint, with a 5
percent increase in overall government spending, that they're going to
announce it when they come here at 1:00 p.m. Would the White
House support the 5 percent increase in government spending?

MR. FLEISCHER: There will be an
event about 1:00 p.m., and I think you will hear the President at that
time discuss what's been discussed on the Hill, the terms of this
agreement. And the President is looking forward to
that. But it looks like, at my last count, it was 4.9
percent.

Q No preview on how the
White House feels about that? It's something you can accept,
I guess.

MR. FLEISCHER: I think the
President will express it, himself.

Q Ari, why does the
President think he hasn't had more success with moderates, in terms of
convincing them or -- one or two, however many he needs to jump ship
and support the tax cut that he wanted, the size and the spending at
the level he wanted?

MR. FLEISCHER: I think that's a
question you need to put to others -- they should explain their
actions. It's not for the White House to explain
that. But, you know, the President, when you take a look
back from the beginning of the campaign when he started talking about
tax relief, when he announced his tax proposal on December 1st, I think
it was, in 1999, and to where we are today, the President is nothing
but pleased with what has taken place and how real this matter has now
become and how the American people are about to get tax relief.

From the beginning, he never expected to get
everything his way entirely -- never. He is extraordinarily
pleased that he is getting so much of what he sought on behalf of the
American people. This tax relief package will be the largest
tax relief package in a generation. It will be the biggest
tax cut since Ronald Reagan, and the President is nothing but pleased
with the result of the negotiations as a result of the willingness of
many Democrats to come together and support him -- Democrats who have
broken with their party because they, too, like President Bush, believe
in bipartisanship and putting the country first, which is what this
agreement represents.

Q Ari, on Social
Security, if the President knows what his principles are and if he has
stacked this commission with people who agree with those principles and
all that's left are the details, why does he need a
commission? What does he have the executive branch
for? Is this just political cover?

MR. FLEISCHER: Well, the
commission, as the President said this afternoon and this morning in
the Rose Garden, is designed to help formulate many of the specific
policies that will be necessary to implement the Social Security
proposal the President wants to submit to the Congress.

But the reason the President has proposed this
commission is because he doesn't want a commission that is covered in
dust or is left in the dust. He doesn't want a commission
that results in gridlock. He wants a commission that results
in action.

And it has been too often -- not always, but
too often -- the history of Social Security that commissions did gather
dust or they did create gridlock. The President wants to
break that pattern this year and that's why he has appointed the
committee that he has, the commission that he has.

Q But why doesn't he
have people who are on his payroll who are accountable to him develop
these policies and he stand out front and say, these are the policies
which I am going to propose? Is he distancing himself from
this commission or is this some kind of political --

MR. FLEISCHER: I think if the
President could have been fortunate enough to have Senator Moynihan on
his payroll, he might have been interested in doing that.

No, the point is that commissions --
commissions have had a history, when they're properly designated and
established, of breaking through gridlock, of forcing results, of
forcing action. And that is the pattern the President wants
to create.

He very much wants to present a plan that is
bipartisan to the United States Congress that helps create personal
accounts, that doesn't raise taxes, that saves Social Security,
particularly for younger workers. And that's the purpose of
this commission.

Q How do you develop a
consensus when you start out with a group that already agrees with
you?

MR. FLEISCHER: First of all, it's a
group of eight Democrats and eight Republicans, so this is a bipartisan
group and it represents a lot of new ways of thinking about Social
Security.

And so the very nature of the group itself,
it's diverse, it's bipartisan and it represents a new way of thinking
on how to save Social Security. That in itself sends a
powerful sign to the Congress. And the President ran on six
specific principles on Social Security and no one should be surprised
that the President is putting together a commission that will help him
get those principles enacted into law.

I think the surprise would be if the President
put people on a commission that would do the opposite of what he told
the American people he would do. And the best example of
that I can offer you is the President has said, unlike some people in
this town, that taxes should not be raised as a solution to Social
Security -- which is the way Social Security's problems have
historically been addressed, principally, by raising taxes.

The President does not support raising taxes
to save Social Security. So why on earth would he put somebody on the
commission, for example, who advocates raising taxes? That's
a formula for a gridlock, that's a formula for more division, and
that's not the formula the President thinks will be the most successful
bipartisan one to actually get action on Social Security.

Q Who are you
kidding? This is window dressing. You want the
panel to endorse exactly what you're thinking, why issue a report?

MR. FLEISCHER: Well, if you look at
previous commissions that have worked on Social Security, the
Quadrennial Commission is the last commission that issued a report on
Social Security, it was so badly and bitterly divided that they
couldn't even get a majority opinion. They had three
separate blocks ont Quadrennial Commission on Social
Security. They were divided in three.

Again, that's a formula for gridlock, a
formula for further inaction at a time when our nation needs to move to
save Social Security, because in the President's opinion, the longer
you wait, the harder it gets. So he's very proud to have put
together a commission that represents this new way of thinking, his way
of thinking and a bipartisan way of thinking, to save Social Security.

Q Is it correct to
assume that the principles, at least, are immutable, that in any
legislation that does come down the line, that he won't accept
legislation that does not adhere at least to these principles?

MR. FLEISCHER: Keith, if you're
asking me if some people say the way to save Social Security is to
raise taxes, will the President agree. The President will
not agree. That's one of his principles. The six
principles are the principles the President ran on, that he believes
in. It's the charge to the commission, as you heard the President
explain today. And those six principles are sound.

I think it's a sign of growing bipartisan
strength that he is able to put together eight Democrats and eight
Republicans to help him carry out his way of reforming and saving
Social Security. It's a real sign of how Washington can
change. And there will be many people on Capitol Hill,
current members of Congress, who welcome this, who welcome the
bipartisanship of it, who welcome the new way of
thinking. There may be some who don't, and the President
will listen to those voices.

But many of those voices do not support the
creation of personal accounts to save Social Security, and they may,
indeed, support raising taxes. That's just not the
President's approach. So don't be surprised to see him fight
for what he believes in.

Q Did he consult with
Democratic leaders?

MR. FLEISCHER: In the creation of
the commission?

Q Yes.

MR. FLEISCHER: I'd have to check
with Congressional Affairs on exactly who got phone calls.

MR. FLEISCHER: Well, it's an
entirely different commission, in 1983 the commission included sitting
members of Congress. My old boss, Bill Archer, for example,
was a member of the Greenspan Commission in 1983. This commission, by
design, does not include sitting members of Congress. So it shouldn't
surprise you there is a difference.

Q Daschle and others
are already essentially saying that this entire thing is a recipe for
gridlock, that they're going to hold up the Senate, whatever it takes,
they're not going to let any kind of privatization measures go
through.

What makes the President think that this kind
of commission, rubber-stamping his ideas, can possibly get through?

MR. FLEISCHER: I think the
President will be very -- look, the President's focus is going to be on
moving forward and getting things done. And that's what this
commission represents, and that's what the American people want to have
happen on Social Security. I think the President would hope that nobody
would engage in gridlock at a time where our nation needs action, so
that Social Security can be saved.

For instance, Congress, whether it was under
Democrat control or Republican control, what actions have been taken in
Congress to save Social Security? It is important to think
new and to have a commission that supports the President's idea step
forward, because the job has not been done in many a recent year, no
matter who controlled the Congress.

So if the current Congress were able to get it
done, we may have seen action previously. But the President
does believe this Congress will be able to get it done with the help of
this bipartisan commission.

Q Senator Daschle
argued this morning, as Democrats did during the campaign, that if you
go to private accounts, people will wind up with 20 percent less in
terms of the benefits they've received. That was a study
that was quoted back during the campaign. What do you say to
those who argue that this cannot possibly give people more money?

MR. FLEISCHER: I think Senator
Moynihan, the former Democratic Chairman of the Senate Finance
Committee, said it very well when he said this morning that personal
retirement accounts are a way to create wealth for individuals, wealth
for younger workers, wealth that people can pass on from one generation
to the next, which you cannot currently do under the Social Security
system.

So the answer is the answer that many other
Democrats have given. Social Security personal accounts represent a
new way of thinking that creates individual wealth that allows people
to retire in greater comfort and security.

Q Are you suggesting,
whether it creates wealth or not, that even if it is in an individual
account that you will wind up with less money overall? What
assurance do you have from what the administration has looked at that
that will not be the case?

MR. FLEISCHER: Well, under every
formulation that has been examined involving these accounts, the six
main proposals that exist on Capitol Hill dealing with personal
accounts, each one of them creates a new system whereby retirees will
have a greater rate of return on the money that is taken out of their
payroll check, out of their taxes, and therefore they will have more
money to retire, rather than less. So I think the facts
suggest otherwise.

Q Can you give, like, a
specific example of how you think this commission can change the
dynamic of this debate? Do you think this is about
lobbying? Do you have 16 people now that are essentially new
lobbyists for the White House? Is this opening up
communication lines? Is there something they are going to
write in part of the bill that will, you know, change the
conversation? Specifically, what can they do?

MR. FLEISCHER: Let me answer that
in two answers, two points. One, the dynamic of the debate
has changed dramatically in just the last five to 10
years. There used to be a time when people would not even
countenance the idea of allowing people to have their own personal
retirement accounts. That day has long gone by now. That
day is over.

Now it is just a question of how few people
are left who don't support that idea, Democrats, Republicans, many new
thinkers -- the new Democrats, for example, are powerful advocates of
the idea of personal accounts. So the dynamic of the debate
has changed dramatically as a new generation of seniors hits 65 who are
used to having control of their own money for investments, and they use
their own choices, made their own decisions and have been pleased with
the returns they've gotten on money they've invested.

In addition, tens of millions of Americans
have become investors in recent years, who never used to be investors
before. America is increasingly -- has a new class of
people, and the investor class. The last count I saw, there
were some 60 million to 70 million Americans who own mutual funds.

That's changed the nature of the debate from
where it was five or 10 years ago, where the only answers were to cut
benefits or to raise taxes. Specifically on your question involving
the commission, the charge of the commission, as the President
explained it today and as you can see in the executive order, which was
distributed to all of you, is to come up with the specific policy ideas
to help implement the six principles that the President has
proposed. And that will be the task of the commission.

They will work under the President's
leadership. So after they make their report, there will be
an interim report and then this fall they'll have the final
report. Then I think you'll see the President work very
diligently in displaying great leadership to work with members of
Congress of both parties who are willing to listen and work with him to
get Social Security reform.

Q Does he expect this
commission to help him with Congress?

MR. FLEISCHER: He expects the
commission to come out with good ideas; and to the degree that good
ideas help with Congress, of course the answer is, yes. But
the task of the commission is to come up with the ideas.

Now, I think the commission will, of course,
talk and work with members of Congress. So along the way to
developing their specific recommendations and specific detailed plans,
they will of course be in contact with members of Congress and make the
case as it develops.

Q Ari, on that point,
you said you were going to check. Will the commission hold
open hearings?

MR. FLEISCHER: I did look into
that, yes, thank you for whoever asked that this
morning. The commission is constituted under FACA, the
Federal Advisory Commission Act and, therefore, meetings will be open.

Q Ari, on the private
accounts, particularly on investing with those private accounts in the
market, the idea the President discussed during the campaign, that new
investor class that you discussed, discovered in the past year the
degree to which private investments can decline rapidly.

Is the President prepared to make any kind of
commitment about a minimum level of payout it would have, even if
somebody in that portion of the account that was privately invested
ended up losing more or not getting as much as they would get under the
existing system?

MR. FLEISCHER: Well, the details,
of course, will be up to the commission to take a look at, and I don't
want to prejudge what the President will conclude after he receives
their reports. But over a 20-year historical time period,
there has never been an instance in which the stock market has not
returned positive results, not once over 20 years. This goes back even
before the Great Depression, through some 11 or 12 recessions and
through two World Wars. Over any 20-year period, the market
has always returned a favorable result.

The problem with Social Security is, as it is
currently constituted, it's a wonderful program for existing seniors
and those who are near retirement, which is why the President will make
no changes and will preserve the program in its exact form for those
people.

But for younger workers, they will pay so much
more in taxes than they can ever hope to get back in benefits, the only
solutions are to raise taxes, which the President does not believe in,
to cut benefits or to find a way to let those younger workers have a
higher rate of return on the money that is taken out of their
paycheck.

After all, it is their money, they earned
it. It has been taken from their paycheck and the government
has invested it for them in Treasury bills, which historically have
paid a very low rate of return. So just looking back over
history over any 20-year period --

Q Ari, that doesn't
specifically answer David's question. The President during
the campaign as a candidate was unwilling to say whether he would
support a guarantee for people in the position that David is talking
about. Is it still his position that he has no position on
that?

MR. FLEISCHER: Mimi, there is only
one guarantee. And that is, if you don't take action to save
Social Security, no one will get any money back because the system will
start spending more than it pays in, in 2016. I think you have to
allow the commission to complete its work.

Q But you're saying,
then, that somebody who doesn't necessarily choose -- some younger
person who doesn't necessarily choose the privatization option as part
of his or her package, does not get a guarantee that they will get at
least as much as people who remain in the system are getting.

MR. FLEISCHER: I said you have to
allow the commission to complete its work and then you will see exactly
what the details are.

Q So the President
won't commit to that?

MR. FLEISCHER: You have to allow
the commission to complete its work. Let's see what the commission
comes up with. But there is only one
guarantee. And that guarantee is that unless something is
done to save the system, there won't be Social Security for younger
workers. The system will start paying out more than it takes
in, in just around 15 years from now -- and the Social Security system
won't even be able to pay benefits for people who are
young. And that's an unacceptable answer.

There are really only three ways to skin this
cat. One is to raise taxes, two is to cut benefits, three is
to get a higher rate of return. And the President believes the answer
lies in the third category and so, too, do many Democrats and
Republicans, and that's why he's pleased to put together this
commission.

Q You're, in effect,
cutting benefits by getting people to move part of the money out of the
system.

MR. FLEISCHER: Absolutely not. That results in an
increased benefit, because people have more money to retire with.

Q And you haven't ruled out today, ultimately the
President accepting a plan that either does cut benefits in some way or
increases the retirement age?

MR. FLEISCHER: You've seen the six
principles the President has announced, and now the commission will do
its work.

Q Has the President
instructed the commission to look into this guarantee, or a minimum
pay-out option?

MR. FLEISCHER: You heard his
statement today.

Q And is the commission
going to hear contrary views, people who oppose the private accounts?

MR. FLEISCHER: I think it's likely
they will.

Q Ari, last month, Koch
Industries, one of the nation's largest oil companies, pled guilty to a
felony environmental crime. The Washington Post reported
also last month that the company and its employees gave $30,000 to
President Bush during the presidential race and a similar amount in
1995 as governor of Texas when he was running.

Question: is the President now
going to give the money back because the company has been convicted of
a felony, and does the President have a policy of accepting campaign
contributions from convicted felons?

MR. FLEISCHER: Can you give me a
list of who the individuals were who gave contributions, and were any
of these individuals convicted, or was it the company?

Q The company was
convicted, but the company also gave --

MR. FLEISCHER: So it was not the
individuals? So it was not the individuals?

Q The company is
convicted of a felony, and the company gave money to --

MR. FLEISCHER: So, therefore, every
employee of the company is a felon? Mr. Kinsolving?

Q No, wait,
wait. If I could follow up, the company was convicted of a
felony, the company gave money to the campaign. What is the
President's policy --

MR. FLEISCHER: The company gave
money to the campaign?

Q Yes.

MR. FLEISCHER: You cannot have
corporate --

Q Bush received more
than -- according to The Post, Bush received more than $30,000 from
Koch Industry, it's K-o-c-h, and its employees in the presidential
race, and received a similar amount since 1995 as --

MR. FLEISCHER: As you're aware,
it's illegal to accept corporate contributions in federal
campaigns. So therefore, any contributions came from
individuals. So unless you're prepared to say that any
company that has a conviction means all its employees are felons, I'd
be careful there.

Q Okay, let me just
have one further follow-up. Is it the President's policy,
does the President have a policy on accepting money from executives of
corporate felons?

MR. FLEISCHER: Again, individuals
are free to give money in their own capacity, and it is illegal to
accept money from corporations, as you know.

Q Ari, there are
reports that the Secret Service has supported the closing of
Pennsylvania Avenue in front of the White House and Blair House ever
since Agent Coffelt was killed defending President
Truman. But Congresswoman Connie Morella of Maryland wants
it opened again.

And my question is, does the President -- and
I have a follow-up -- does the President support this lady, who almost
always votes with the Democrats, or does he support the Secret Service
in realizing what a McVeigh truck could do to a visiting prime minister
or president staying in Blair House?

MR. FLEISCHER: Les, the President
has not made a determination yet about what action will be taken with
Pennsylvania Avenue. He is aware that there are some very
important viewpoints on both sides of that issue, but he's made no
final determination. I'll try to get an update on it.

Q The Supreme Court
rejected Ralph Nader's appeal, in which he sued because he and other
fringe presidential candidates were excluded from presidential
debates. And the court reviews --

MR. FLEISCHER: Is this a follow-up
to Pennsylvania Avenue, because they were trying to get on Pennsylvania
Avenue to get to the White House? (Laughter.)

Q A two-part -- they
both concern the White House. (Laughter.) And the Court
refused Nader even a comment. And I wanted to know, does the
President agree with the Court's decision or not, and does he think it
was appropriate for the Court to have no comment at all for the
dismissal of plaintiff Nader's questionable suit?

MR. FLEISCHER: Les, unless I'm
advised otherwise, the President does not typically comment on judicial
rulings of that nature.

Q What is the position
of the President on the Navy exercise in Vieques?

MR. FLEISCHER: The President
believes it is very important for the peace of our nation and around
the world that our troops be combat-ready, be well-trained, and able to
carry out their missions. And that's why the President has
asked Secretary Rumsfeld to continue his efforts to make certain our
troops are trained while working with the government of Puerto Rico on
the matters that they have raised in regard to the training exercises
at Vieques.

Q Has the President
been in contact lately with the governor of Puerto Rico?

MR. FLEISCHER: You may want to talk
to the Department of Defense. As I just mentioned, The
President has asked the Defense Department -- and they have been
handling it -- to work with officials on the island.

Q Ari, on the tax cut
agreement, does the President have any preference what parts of his own
$1.6 trillion plan need to be squeezed down to $1.25 trillion?

MR. FLEISCHER: The President is
going to continue to work with the Congress on that. The
next step, of course, will be after the budget resolution is enacted
then it will be up to the Senate Finance Committee to start work on its
version of the tax legislation. And then it, of course, will
go to a conference, where so much of what the President has proposed
has already been voted on and passed in large bipartisan votes often in
the House of Representatives. So the President will be
pleased to continue to work with the Congress and the Senate Finance
Committee.

Q But what components
of that plan do you prefer being modified?

MR. FLEISCHER: I think the
President is content to let the debate begin in the Senate and he will
make his thoughts clear at the appropriate time.

Q Ari, what does the
President hope to accomplish in the meeting tomorrow with the Israeli
foreign minister?

MR. FLEISCHER: It will be part of
the ongoing conversations that the President is having with leaders in
the region to help create a framework that supports peace, that helps
two parties come together by reminding them that it's really up to the
Israelis and the Palestinians to create the will to create the peace
and the United States will be there to help facilitate it.

Q What's the current
view here on prospects for resumed direct Israeli-Palestinian
negotiations?

MR. FLEISCHER: As you know, Israel
and the Palestinians have been meeting. They have been
talking. There have been a series of security talks.

Q Formal negotiations
beyond these?

MR. FLEISCHER: These are formal
security talks that have been under way now for approximately two,
three weeks, so those have begun.

Q May I follow on
Peter's? Do you know what -- do you have any preview about
the speech the President will give tomorrow to an American Jewish
group? And do you know what progress Paris is making on
Egypt and Jordan guaranteeing the peace?

MR. FLEISCHER: The speech tomorrow
night to the American Jewish community is going to be an interesting
speech. The President is going to talk about religious
freedom around the world. He is going to discuss some of the
problems and he'll be specific. Where religious freedom is
-- people who want to practice their religion are
persecuted. And his remarks will be a very clear call around
the world to recognize the importance of religious freedom so people of
all faiths can have the right to worship as they see fit.

Q Will we get an
advance text?

Q Will he single out
China or Sudan, Ari?

MR. FLEISCHER: We are going to try
to distribute the remarks tomorrow prior to the speech. So
let's talk tomorrow and I'll see what time I can get you an embargoed
topic.

Q Will he also talk
directly about the current situation in the Middle East and what the
administration is doing to try and bring Israelis and Palestinians
together? I mean, any specifics on that in that speech?

MR. FLEISCHER: I just outlined to
you the core of what the speech will be tomorrow. And you
will be able to look at it in its entirety tomorrow and judge for
yourself. But what I just outlined is the heart of the
message tomorrow.

Q Ari, the President
told the education round table yesterday that he had basically given up
on getting vouchers, enough support for private school vouchers in
Congress this year. Is this something that he is planning on
bringing up year in and year out? Is he committed to that --

MR. FLEISCHER: He didn't say he was
giving up. He said he still believes in
vouchers. There will be a vote on the floor of the Senate,
an amendment to allow for more school choice options. The
President hopes that will pass. And we'll see how that vote
comes out.

Q He called himself a
realist. If it doesn't happen this year --

MR. FLEISCHER: The President is
always a realist.

Q Well, is he committed
to bringing it up in future years if it doesn't happen this year?

MR. FLEISCHER: I am not going to
guess what's going to happen in future years. Let's let the
vote take place first and see if the President's position finds
sufficient support.

Q On tax cuts, you
acknowledge, I gather, the fact that it is $300 billion less or more
will require fundamental restructuring of the way the benefits are
given out?

MR. FLEISCHER: No, I don't think
that's true. One of the most

interesting things about tax legislation, it's so numerical that you
can still have the core principles of what you believe in -- in this
case, across-the-board marginal income tax rate cuts, marriage penalty
relief, death tax relief, and there are all kinds of ways to look at
phase-ins and the periods of time at which things become effective, to
implement the same policies over a slower period of
time. Which means that the tax cut can be accomplished for
less money over a longer period of time.

Thank you, everybody.

Q Hold
on. Like Lester, I have one completely unrelated follow up.
(Laughter.) On the faith-based initiative, have you lost
momentum on that? And what do you make of the fact that a number of
Southern Baptist ministers are now opposed to the President's
proposal?

MR. FLEISCHER: Frankly, that's
nothing new. Since the President made his proposal, there
have been reflections from both the left and the right that have raised
questions. But the mainstream middle, many people on all
sides, including others on the left and right, have supported it.